Wales calls for help with shale gas development
A report has highlighted significant potential in the region
Wales has called on the UK government and private energy firms to help it develop a shale gas industry. A new report from the Welsh affairs committee (WAC) - a UK House of Commons group - said that Wales could have significant potential for developing shale gas. However more data were needed on reserves and the environmental impact of development, it said.
The report, published on 16 June, called for both the Welsh and UK governments to work with energy firms to assess the country's potential shale gas reserves and to encourage development without causing environmental damage. "Shale gas offers a wealth of potential benefits for Wales, in terms of energy supply, economic benefits and employment," David Davies, a Welsh member of parliament and chair of the WAC, said. "We know there is some environmental risk: the UK and Welsh Governments must demonstrate that everything has been done to assess and mitigate (it)...before we move forward and maximise the benefits for Wales."
The WAC wants private energy companies to help the UK and Welsh governments to provide 'a reliable range of estimates' for shale gas reserves in Wales by the end of this year. Last year the UK's British Geological Survey (BGS) said there could be 2,281 trillion cubic feet (cf) of shale gas lying within the Bowland Basin, in northern England.
Shale gas development in Wales, as in England, is at the exploratory stage so there are very few data available on potential reserves. Seven companies are carrying out exploratory drilling for shale gas and coal-bed methane across 23 licence areas. Australian firm Eden Energy has said there could be 34.2 trillion cf of shale gas across seven of its licenses in South Wales. These cover an area of around 806 square kilometres. Eden, which has a 50% stake in the licenses alongside Coastal Oil and Gas, a Cayman Islands-registered firm, said around 12.8 trillion cf was likely to be recoverable. The report said it could take a decade before an unconventional gas industry is fully developed in Wales.
The WAC wants both the UK and Welsh governments to work together to assess the impact of developing shale gas on Wales' energy mix, economy and environment. This would include an assessment into its effect on carbon emissions targets, local job creation and other financial benefits to communities. It also said both governments must develop a regulatory framework for mitigating road traffic and noise caused from operations, the visual impact of projects and any other environmental risks associated with fracking. "The disruption caused by traffic and noise pollution during shale gas development and extraction is a significant issue," the WAC said. "We have concerns that large numbers of lorry movements to and from shale gas sites, as well as the noise at those sites, will have a negative impact on the Welsh countryside and the quality of life for local communities."
Wales has many natural parks, protected environmental sites and areas of natural beauty. These areas must be protected from any environmental damage caused by shale gas extraction, the report said. The WAC added that a robust regulatory regime for treating and disposing of wastewater must also be developed to ensure toxic and radioactive water is not allowed to contaminate supplies of drinking water. Natural Resources Wales (NRW), which regulates waste sites and licenses water abstraction in Wales, has said shale gas operators would have to provide a plan to dispose of wastewater from sites. This would be monitored through a combination of audits, spot checks and site visits.
The WAC said shale developers should pay for an independent environmental impact assessment at the exploratory stage of any significant shale gas development. It added that the UK government should also publish an analysis of the amount of Welsh water resources needed to service the unconventional gas industry in other parts of the UK.
Michael Fallon, a UK's energy minister, has said the Department of Energy and Climate Change (Decc) expects to issue 50-150 onshore licences, including for shale gas development, in the upcoming 14th round. Ed Davey, the UK's senior energy minister, told journalists in London on 10 June that Decc expected huge interest from energy firms hoping to tap the UK's shale gas resources. Details of when the licensing round will be held and which areas will be on offer have not yet been released.
Applying for drilling licenses in Wales
The onshore oil and gas industry in Wales is regulated by a number of statutory bodies. These include the Decc, NRW, the Health and Safety Executive (HSE) and local authorities. Potential shale gas developers would need to obtain several licences to drill. These include petroleum exploration and development licences from Decc, planning permission from local authorities, access rights from landowners and up to 11 environmental permits or consents from NRW.
Developers would also need health and safety regulations and permits, mainly related to design, construction and operation of gas wells, from the HSE as well as consent to drill and carry out fracking from Decc.